At December 31, 2019, CoreCivic owned 72 correctional, detention, and residential reentry real estate properties, and 28 properties for lease to third parties. At December 31, 2019, CoreCivic also managed seven correctional and detention facilities owned by governmental agencies.

	December 31,
	2019			2018
Land and improvements	$	295,214		$	294,774
Buildings and improvements		3,411,583			3,490,725
Equipment and software		435,628			432,196
Office furniture and fixtures		38,278			34,968
Construction in progress		29,521			94,590
		4,210,224			4,347,253
Less: Accumulated depreciation		(1,510,117	)		(1,516,664	)
	$	2,700,107		$	2,830,589

Construction in progress primarily consists of properties under construction or expansion. Interest is capitalized on construction in progress and amounted to $6.0 million and $1.0 million in 2019 and 2018, respectively. There was no interest capitalized on construction in progress in 2017.

Depreciation expense was $137.7 million, $152.0 million, and $145.7 million for the years ended December 31, 2019, 2018, and 2017, respectively.

Eleven of the facilities owned by CoreCivic are subject to options that allow various governmental agencies to purchase those facilities. Certain of these options to purchase are based on a depreciated book value while others are based on a fair market value calculation. Four of the facilities that are subject to options are accounted for in accordance with ASC 853 and are recorded in other real estate assets on the consolidated balance sheets, as further described in Note 2. As of December 31, 2019, CoreCivic had approximately $238.6 million in other real estate assets, including $147.8 million accounted for as a contract cost and $90.8 million accounted for as costs of fulfilling the related service contract. As of December 31, 2018, CoreCivic had approximately $247.2 million in other real estate assets, including $150.1 million accounted for as a contract cost and $97.1 million accounted for as costs of fulfilling the related service contract.

In June 2013, CoreCivic entered into an Economic Development Agreement ("EDA") with the Development Authority of Telfair County ("Telfair County") in Telfair County, Georgia to implement a tax abatement plan related to CoreCivic's bed expansion project at its McRae Correctional Facility. The tax abatement plan provides for 90% abatement of real property taxes in the first year, decreasing by 10% over the subsequent nine years. In June 2013, Telfair County issued bonds in a maximum principal amount of $15.0 million. According to the EDA, legal title of CoreCivic's real property was transferred to Telfair County. Pursuant to the EDA, the bonds were issued to CoreCivic, so no cash exchanged hands. Telfair County then leased the real property back to CoreCivic. The lease payments are equal to the amount of the payments on the bonds. At any time, CoreCivic has the option to purchase the real property by paying off the bonds, plus $100. Due to the form of the transactions, CoreCivic has not recorded the bonds or the capital lease associated with the sale lease-back transaction. The original cost of CoreCivic's property and equipment is recorded on the balance sheet and is being depreciated over its estimated useful life.